New Delhi: India’s commerce resilience stays robust regardless of the 25% tariff imposed by US President Donald Trump on Indian items, with the nation’s broader export base and robust home fundamentals serving to buffer the shock, trade physique PHD Chamber of Commerce and Business (PHDCCI) mentioned.
A white paper launched by the trade physique estimates that whereas the tariff will have an effect on round $8.1 billion price of exports to the US, the general affect on India’s financial system is predicted to be restricted, with a projected GDP hit of simply 0.19%.
“Our evaluation signifies that there might be an estimated affect of just one.87% on India’s complete world merchandise exports and a negligible 0.19% on India’s GDP,” mentioned Hemant Jain, president of PHDCCI. He added that India continues to be the fastest-growing main financial system on the earth, with the IMF projecting 6.4% development in 2025–26.
The tariff, which affects a wide range of Indian goods coming into the US market, has drawn explicit concern from sectors similar to engineering items, electronics, prescribed drugs, gems and jewelry, and ready-made clothes.
In line with PHDCCI estimates, the engineering sector faces the biggest publicity at $1.8 billion, adopted by electronics at $1.4 billion, prescribed drugs at $986 million, gems and jewelry at $932 million, and attire at $500 million.
In response, the chamber has proposed a four-pronged technique to mitigate the fallout. These embody negotiating bundled pricing with main U.S. retailers like Walmart and Amazon, creating premium variants of export merchandise, redirecting commerce volumes to different markets such because the EU, Canada, and Latin America, and inspiring joint ventures for on-shore manufacturing within the U.S.
“The tariff problem accelerates India’s want for export sophistication and geographic diversification. Our technique framework offers a roadmap for changing this disruption into a possibility for long-term competitiveness enhancement,” mentioned Jain.
Ranjeet Mehta, CEO and secretary common of PHDCCI, added that India’s diversified financial system and robust home demand provide a cushion towards exterior shocks. “Whereas the 25% U.S. tariff presents challenges, our evaluation reveals the affect stays manageable on the macro stage,” he mentioned.
India exported $86.5 billion price of products to the U.S. in FY25, making it the nation’s largest export vacation spot. With U.S. tariffs now affecting near 10% of India’s complete exports to that market, the trade is carefully watching whether or not additional escalation will observe, notably after Trump warned of doubling down on nations that proceed to import Russian oil.
Regardless of the uncertainty, PHDCCI highlighted India’s rising competitiveness in sectors like electronics, which recorded a 50.7% compound annual development price between FY2020 and FY2025. It additionally flagged robust efficiency in the agri-food sector, with double-digit export development reflecting strong world demand.
Primarily based on a value elasticity of –0.5 and a 25% tariff, India is estimated to lose about $8.1 billion in exports to the US throughout varied sectors in FY2026. Inside this, the export of vegetables and fruit, valued at $331.47 million, may see a possible lack of $31.08 million.
Meat, dairy, and poultry merchandise, which collectively contributed $206.83 million in export worth, are projected to face a lack of $19.39 million. Tea exports could decline by $8.71 million from their FY2025 stage of $92.95 million, whereas jute manufacturing together with flooring coverings may see a $8.34 million hit on $88.97 million in exports.
Tobacco exports, price $86.89 million, could incur a lack of $8.15 million, and occasional exports might be decreased by $7.68 million from a base of $81.89 million. Oil seeds and oil meals, with export values of $59.57 million and $17.33 million respectively, could undergo losses of $5.58 million and $1.62 million.
Cashew exports, at $7.81 million, may shrink by $0.73 million, whereas exports of different cereals are prone to dip by $0.46 million from a complete of $4.96 million. The cumulative estimated loss throughout all affected commodities stands at $8.11 billion.
“The US’ choice to impose a 25% tariff on choose Indian exports seems largely symbolic — greater than half of the $132 billion commerce stays unaffected, and the estimated GDP affect is minimal at 0.2–0.4%. Crucially, dairy has been excluded from any obligation cuts, reaffirming its strategic position in India’s rural financial system and long-term nationwide self-reliance,” mentioned Ravin Saluja, Director of Sterling Agro Industries Ltd. (Nova Dairy).
